Liquor traders threaten to boycott beer for VAT evasion
TEAM HERALD
teamherald@herald-goa.com
PANJIM: Apparently it is not just the Kingfisher Airlines that is in trouble, but in Goa, the flagship beer brand too faces a boycott from retailers.
The Goa Liquor Traders Association has vowed to boycott United Breweries’ Kingfisher beer, alleging that the company was cheating the State government by evading VAT to the tune of Rs 3.5 crore a year, by not including the bottle deposit in the maximum retail price.
The retailers have warned that if the company does not include the bottle deposit in its MRP they will boycott the brand from April 1.
The brewery has responded by saying said that they have arranged for a meeting between the retailers and the company on March 11 during which a solution will be arrived at.
Speaking to media persons, Dattaprasad Naik President of the Association said that the VAT evasion as well as the hassles of returning empty bottles has led them to take the decision and that they would like the support of the bar and restaurant owners to join them too.
“United Breweries charges Rs 72 of bottle deposit per case of large beer bottles. But this is without any receipt. What is on the receipt is the MRP of beer. Given that beer has 22% VAT on the MRP they are saving a VAT of Rs 16 per case of large bottles. On a box of pint beer they are saving Rs 8 per case on VAT,” Dattaprasad Naik said adding that UB was selling 1.50 lakh cases of large bottles a month and 1.65 lakh cases of pint beer.
“The government is losing Rs 3.5 crore on VAT because of not including the bottle deposit on the MRP,” Naik alleged.
“Kingfisher’s competitors, be it Tuborg, Foster’s or Budweiser all include the bottle deposit in the MRP. So why can’t Kingfisher do it? And this practice (of not including the bottle deposit in the MRP) is followed only in Goa,” Naik said.
The Liquor Traders have also written a letter to United Breweries informing them of their decision. “We are not doing anything illegal. We are holding a meeting (with the traders) on March 11 and a solution will be arrived at,” Govind Tiwari the Divisional Vice President of U B group said.
The Liquor Traders have also written a letter to the chief minister asking that a flat 25% VAT be levied at the source and make the retailer VAT free as, according to Naik, VAT at source is 22% and further the retailer pays a VAT of 22% on his margin. “This gives a lot of paperwork hassles and consumes time discouraging dealers from filing,” Naik said.
They have, in the same letter, also asked the chief minister not to hike the wholesale licence fee.
“In Goa retailers are charged a fee of Rs 4,000 in cities and Rs 2,000 in villages, bars are charged Rs 4,000 in cities and Rs 2,000 in villages. But every outlet does the same type of sale irrespective of their licence. This in turn makes it difficult for legal wholesaler to sell and compete with retailers who also have the same benefits from companies,” Naik said adding the association “would not mind if CM increase licence fees for bars substantially as the number of bars is around 7,000 and retailers and wholesalers are only 1626.”
Goa Liquor Traders’ Association has sought a moratorium on new licences for retail sale in packed bottles for at least three years. “The number of licences in Goa is very high and is unsustainable,” Naik said.
They have also asked the government to increase their margins to 20% from the current 7%.
